In Brief
Ambica Construction, a contractor, was awarded Rs. 9,20,694 plus 15% interest pendente lite by an arbitrator for a contract dispute with the Union of India. The contract contained a clause prohibiting interest on amounts payable. The Division Bench of the High Court set aside the pendente lite interest award, relying on this clause. The Supreme Court held that a contractual bar on interest for delayed payment does not automatically bar pendente lite interest, which are distinct concepts. An express, unambiguous contractual bar is required to deny pendente lite interest. The Court allowed the appeal and restored the arbitrator's award of pendente lite interest."
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